Texaco Inc. - which on Monday announced it had struck natural gas off the New Jersey coast - yesterday said that further tests from the same drilling well at shallower depth confirmed "the presence of significant gas reserves at this location."
The company indicated that it had also discovered traces of light petroleum liquids at the site 100 miles east of Atlantic City.
The new optimistic announcement raised the strong possibility that produceable quatities of natural gas exist in the Baltimore Canyon region off the Eastern Shore of the U. S. which is just beginning to be explored.
But Texaco was extremely reticent about providing much detailed information, noting the competitive situation in the area. So far 39 companies have paid $1.1 billion for leases in the offshore region. Both Continental Oil Company and Shell Oil came up with dry holes in their initial drilling attempts. Texaco, in partnership with five other companies, is the first to strike hydrocarbons.
The company reiterated that it will have to drill at least two more wells in the next eight to twelve months to determine the lateral extent of the gas field it has discovered before a decision can be made on whether to install a full production platform, costing $250 million.
"We have purposely kept this vague for competitive reasons," a texaco spokesman said, nothing that there will be further federal lease sales in this area next February, and prices could be affected by the Texaco strike. "We'd like to keep a lot of this proprietary information to ourselves."
Texaco did reveal that the latest gas pocket was an "interval of 40 feet" that "was perforated just before midnight Thursday below a depth of 13,000 feet and flowed natutal gas at the rate of 9.4 million cubic feet a day through a 22/64 of an inch choke."
The well also yielded 2.3 barrels of "condensate" for each million cubic feet of natural gas. The company defined this "condensate" as light petroleum liquids, which it said could be used as a feedstock for a refinery."But such liquids cannot properly be classified as 'oil,'" the Texaco spokesman added.
The initial gas strike was at a depth below 14,000 feet where gas flowed at a rate of 7.5 million cubic feet a day through a slightly smaller choke - 18/64 of an inch - and the interval there was 38 feet.
Texaco senior vice president for worldwide exploration Richard B. Palmer said Monday that in order to be commercially exploitable, the gas field will have to contain reserves of at least 1 trillion cubic feet of natural gas and flow at a rate of 200 million cubic feet a day.